Fort Morgan Breaking News, Sports, Weather, Traffic

Fort Morgan's sales tax revenue still trending down

About 20 percent of General Fund revenue comes from sales tax, Wells says

By Jenni Grubbs

Times Staff Writer

Posted:
01/24/2016 09:46:54 PM MST

By the numbers

Fort Morgan's November sales tax revenue over the years:

2008 — $399,590

2009 — $360,926

2010 — $461,215

2011 — $370,924

2012 — $473,737

2013 — $492,137

2014 — $581,992

2015 — $548,490

November is a hard month to get a handle on as far as predicting how much people will spend and how much sales tax revenue will be generated.

At least that seems to be the case in Fort Morgan, as totals in that month have varied greatly over the last eight years. In some cases, it was a good month, way above average amounts. Other years have seen far smaller totals.

November 2015 was one of the latter, with a large amount added to city coffers but one smaller than many of the preceding months last year. (The state collects the sales tax and then returns the city's portion, which means the reporting of the local numbers usually are about two months behind.)

Regardless, Fort Morgan officials were OK with the $548,490 in sales tax revenue on City Treasurer Jeanne Kinney's monthly report; it was still more than half a million dollars.

The city is still on track to finish well above the "conservative" projection for sales tax revenue set in the 2015 city budget, she said, as well as likely topping 2014's record total of about $6.66 million once the final month's total comes in during February.

Advertisement

"We're still going to beat it," Kinney said. "All the way through the 11th month, we're over. If we can get at least $200,000 in December, we're over last year."

Unless Fort Morgan shoppers spent far less than normal during the holiday season, reaching that target should be relatively easy. Kinney does not expect the city will have the all-records-breaking $718,826 monthly total in December 2015 that it had in 2014, but it typically is a bigger month for spending.

As for what's in store for 2016, Kinney hopes to see at least half a million monthly totals.

"If we keep in the $500,000 range, we can count on $6 million," she said. "That's pretty good. We did not project that much for 2016."

Downward economic trend

Fort Morgan City Manager Jeff Wells said he expects to see some lower numbers in coming sales tax revenue reports, though.

"We're on a downward trend," he said. "We anticipate that we will be affected by the business cycle for the region. We anticipated it with the slowdown of the oil and gas (industry)."

Like Kinney, Wells is not worried about an economic downturn and less sales tax revenue leaving the city budget in a pickle.

"We budgeted very conservatively for 2016 as it pertains to revenue, and I anticipate that we will have adequate revenue to continue operations in the city if the downturn continues," he said. "With that said, we continue to receive higher revenue that what we were receiving three years ago, so I'm not extremely concerned about the downtown we're seeing right now."

Sales tax misconceptions

During his recent annual report to the Fort Morgan City Council, Wells addressed some possible misconceptions about the city's sales tax revenue.

"The general fund is a small part, about 20 percent, of the overall budget," he explained, and about half of the funding for the General Fund was projected to come from sales tax.

"And while we appreciate increases in sales tax because that assists in most cases to put money in reserves for projects," Wells said, "when we see an increase in 5 percent in overall sales tax, it's only 5 percent of 10 percent of the overall budget. So those are some things to think about when we look at these increases and where that money goes."

His point was that there is not a huge extra amount of money coming in that could fund residents' big-ticket wish-list items.

"I get comments a lot of the time from people and other organizations in the community that say, 'Boy you're having all that increase in sales tax. We can build a community center or we can do something else.' It doesn't relate to that much money," Wells said. "I try and tell them, 'Yeah, it's a significant increase when you look at dollars, but in the overall picture of operations of the city, it's not all that much money.'"

But it may be enough extra to help with something like expanding on already-planned road improvements or small-scale stormwater drainage projects. Or at the least, it's the money that back-fills city reserve funds and ensures Fort Morgan has a robust rainy-day fund, and as the current downward trend shows, sales tax revenue increases are not something to be counted upon.

Article Comments

We reserve the right to remove any comment that violates our ground rules, is spammy, NSFW, defamatory, rude, reckless to the community, etc.

We expect everyone to be respectful of other commenters. It's fine to have differences of opinion, but there's no need to act like a jerk.

Use your own words (don't copy and paste from elsewhere), be honest and don't pretend to be someone (or something) you're not.

Our commenting section is self-policing, so if you see a comment that violates our ground rules, flag it (mouse over to the far right of the commenter's name until you see the flag symbol and click that), then we'll review it.